AT&T to pay $11.3 billion for Teleport: seeks to expand into local US markets

Article Abstract:

AT&T said it acquired alternate local telephone company Teleport Communications Group for $11.3 billion in stock. Completion of the deal would enable AT&T to re-establish a significant local telephone presence for the first time since it was forced to divest its local operations as part of a 1984 antitrust settlement. Teleport, which competes against local phone companies such as Bell Atlantic, almost exclusively serves business customers. The Staten Island, NY-based Teleport had revenue of $267.7 million in 1996. Financial terms call for Teleport stockholders to receive 0.943 share of AT&T stock for each Teleport share, of $59.06 a share, and AT&T will assume Teleport's approximately $1.12 billion debt. The move continues a series of changes in the telecommunications industry since the Telecommunications Act of 1996 took effect, as local and long-distance companies seek to enter one another's markets.

Mergers, acquisitions and divestments, Company acquisition/merger, Teleport Communications Group Inc., TCGI

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Some applause for AT&T's shake-up

Article Abstract:

Money managers are responding favorably to AT&T Chmn C. Michael Armstrong's drastic shake-up measures. The telecommunications giant's overdue plans to reduce costs sharply, as well as pursue new digital initiatives, please Strong Dow 30 Value fund manager Charles Carlson. AT&T digital plans include the Internet and wireless services, but they lack Armstrong's cost-cutting specifics that feature trimming up to 18,000 jobs. The money managers question AT&T as a strong investment, because company stock has more than doubled since Apr 1997 to $62.625. Revenue growth represents the greatest AT&T challenge, however. AT&T has not outlined a strategy for entering the $80 billion local telephone market, according to a manager with the Stein Roe Young Investor fund.

Management, Company restructuring/company reorganization, Reorganization and restructuring, Armstrong, C. Michael

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